A Critical Review of the Characteristics of Presumptive Tax Systems in Developing Countries

Munyaradzi Duve () and Daniel P. Schutte ()
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Munyaradzi Duve: DEPARTMENT OF ACCOUNTING _ INFORMATION SYSTEMS_ GREAT ZIMBABWE UNIVERSITY_ MASVINGO_ ZIMBABWE
Daniel P. Schutte: SCHOOL OF ACCOUNTING SCIENCES_ NORTH-WEST UNIVERSITY_ POTCHEFSTROOM_ SOUTH AFRICA

Theory Methodology Practice (TMP), 2021, vol. 17, issue 02, 27-43

Abstract: This paper considers the effect of the presumptive tax system characteristics on the tax compliance behaviour of small businesses in developing countries. Since the concept of presumptive taxation involves several features influencing the formalisation of small businesses, this paper seeks to survey three key areas of literature: targeted taxpayers, thresholds and timeframe. This paper differs fundamentally from previous studies in that it analyses presumptive tax system characteristics. A descriptive review approach was followed in evaluating the empirical literature on presumptive tax system characteristics. A content analysis was then performed on literature about categories and subcategories provided in the classification framework. The review highlights similarities and conflicting evidence of presumptive tax system characteristics in transforming the compliance behaviour of small businesses. It was concluded that the blended use of information technology and existing presumptive tax systems can facilitate the movement of small businesses from the informal to the formal sector.

Keywords: presumptive tax system; targeted taxpayers; threshold; timeframe; tax compliance behaviour (search for similar items in EconPapers)
JEL-codes: H25 H71 O1 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mic:tmpjrn:v:17:y:2021:i:02:p:27-43

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